Revered investor Warren Buffett somewhat criticized the hedge fund industry during his holding company Berkshire Hathaway’s annual meeting that took place on Saturday, saying that “there’s been far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities”. The billionaire investor said that the cost of consulting and management, along with commissions, are consuming the returns of high net-worth individuals, endowment funds and public pensions that use hedge fund vehicles. Insider Monkey has advocated the same argument as for why the hedge fund industry has underperformed benchmarks in recent years, but we do try to squeeze the juice from the hedge fund industry by tracking their high-potential ideas. For that reason, the following article will examine four filings submitted to the SEC by several prominent hedge funds tracked by Insider Monkey.
At Insider Monkey, we track around 785 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Steve Cohen’s Successful Family Office Increases Stake in This Pharmaceutical Company
According to a new Schedule 13G filing, Steve Cohen’s Point72 Asset Management L.P. currently owns 3.72 million shares of Pernix Therapeutics Holdings Inc. (NASDAQ:PTX), which constitute 5.8% of the company’s outstanding common stock. This represents an increase from the stake of 1.05 million shares revealed in Point72’s 13F filing for the final quarter of 2015. The shares of the specialty pharmaceutical company have gained more than 38% in today’s trading session even though there is seemingly no company-specific news spurring the surge, save for Mr. Cohen’s filing.
Pernix Therapeutics Holdings Inc. (NASDAQ:PTX) primarily focuses on central nervous system (CNS) indications, which include neurology, pain, and psychiatry, as well as other specialty therapeutic areas. The company’s net product sales increased to $171.26 million in 2015 from $118.01 million in 2014 and $77.53 million in 2013. The massive increase in net product sales in the past two years has been driven by higher sales of Treximet, the only fixed dose combination product indicated for acute migraines. Treximet sales increased by $47.00 million, or nearly 85%, during 2015 to $101.75 million. The specialty pharmaceutical company will release its first quarter earnings report on May 5, which may enable the company to close down a portion of its stock’s 64% year-to-date loss, despite today’s big gains. Kevin Kotler’s Broadfin Capital was the owner of 6.09 million shares of Pernix Therapeutics Holdings Inc. (NASDAQ:PTX) at the end of December.
The next two pages of this article will discuss three separate SEC filings submitted by Adage Capital Partners and two other hedge fund vehicles.